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The Best Anti-Poverty Program? Effective Scheduling of Hourly Workers

Susan Lambert, Associate Professor at the University of Chicago's School of Social Service Administration and the author of a much-discussed op-ed in yesterday's New York Times, once told me that she gets a lot of grief. "You study what," say her social work friends. "Scheduling?"

I am happy Susan's brilliant work is getting the attention it deserves, because reshaping schedules of low-income workers is actually the single best shot we currently have at an anti-poverty program.

Susan makes bold proposals for the redesign of the Fair Labor Standards Act that deserve serious attention. But, as she acknowledges, changing the FLSA is a heavy lift. It's too much to imagine labor wanting to re-open FLSA protections in the current political climate.

So the question is: what can we do now to address the problem of unstable schedules? That's what a union leader asked me last week.

The key is to begin with the facts as employers see them: that the key to global competitiveness is to control their labor costs. They attempt to do this by achieving a tight fit between labor supply and labor demand. To attain this tight fit between, say, sales staff and customers, employers today send staff home if it's a slower day than expected. So a nurse's aide is sent home when she reports to work if the patient census is lower than expected; or a waitress is called in on her day off because the restaurant is surprisingly packed.

The result is schedules that change from day to day and week to week. Often employees get only three days' notice of next week's formal schedule, with the understanding that even this is subject to change.

Meanwhile, the low-wage workforce tends to have a higher load of both child- and elder-care than any other group of Americans. Typically, American families in the bottom third rely on relatives for child and elder care--relatives who often have schedules as unstable as their own.

The result? Absenteeism's astronomical. Turnover's tremendous. Employers bemoan these costs but assume that it is workers' inherent irresponsibility that's to blame.

Now hear this: it's the workers' responsibilities that are to blame. They cannot leave toddlers home alone. They need to take grandma to get treatment for her ulcerating diabetes sores. Anyone who would ignore these basic responsibilities...well, you probably wouldn't want to hire them anyway.

What's the solution? Again, it's all in Susan's research. Susan has documented that in retail stores with just-in-time scheduling often 80% of the hours that need to be staffed do not change from week to week.

She also has documented turnover as high as 500% a year; 80% is commonplace. That's expensive for employers, given that replacing an hourly worker typically costs 75% of annual salary. Absenteeism is also extremely high: Susan's colleague Julia Henly and fellow researchers found that 80% of the sales staff in one department of a large store were on probation due to absenteeism.

What I've proposed is software that will allow an employer to achieve "schedule equilibrium": the point at which there's the tightest fit possible between labor supply and labor demand without driving up turnover and absenteeism. To say this differently, the goal is to drive down front-end labor costs to the maximum extent possible without driving up back-end labor costs.

Such software would make it easy for employers to see that it does not help their bottom line to have schedules that ignore the realities of their workers' lives. You've got to run your company with the workforce you have, not the workforce you wish you had.

How about a shift swapping app? Here’s how it could work: A supervisor could divide employees into groups, e.g., busboys, cooks, servers. Then if someone needed to swap a shift, they could text a message to the relevant group, who could bid to work that shift by sending a text message to the supervisor. The supervisor could okay the swap by text or on their smart phone—and shift swapping would go from being very time-intensive to very easy. The employees would not even need smart phones: all they would need are cell phones capable of sending a text.

Here's another idea. What about a tool employers could use to identify the 80% of hours that are stable from week to week (or whatever the percentage happens to be), so the employer could post those hours as a permanent schedule and then have a different system for staffing the remaining 20% of the hours that are unavoidably unstable?

Remember the union guy who called me earlier this week? He's running some of these best practices up the flagpole right now. This might not be the kind of global solution Susan's called for. But at least it's getting us from point A to point B in a highly, highly, highly--highly--constrained political environment.

Update: In a previous version of this post, I misidentified Julia Henly as Susan Lambert’s student. Julia Henly is in fact Susan Lambert’s colleague, an Associate Professor at the University of Chicago School of Social Service Administration.

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